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Processing Wages via Journals

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    Posted: 16-Jan-2007 at 07:59

The Standing Journals entry in the General Ledger can be used as a template for recording wages in Peach.

 

There is no GST on wages.

Transactions recorded via General Journals are excluded from the GST Reports

 

A “standard” setup for a week’s wages can be set up in General Journals, then “stored” by clicking on the “Store” button. 

Note this does not process the transaction, just stores a copy of it.

 

You can then retrieve this copy by clicking on the Retrieve button and selecting the Standing Journal you want to use (if you have more than one set up)

Most Important: Put in the appropriate date – the standing journal will be retrieved with the original date

Then edit the details as required for the week you are paying, then click the OK Button to process the transaction.

 

In the example below, a single cheque for $925 is cashed to pay wages for the week.

John is paid Gross Wages of $600, $100 is withheld for PAYG – nett of $500

Mary is paid a Gross of $500, $75 withheld for PAYG, - nett of $425

 

 

In this example, a separate ledger has been set up for each employee’s wages (Overhead Expenses), but a single Liability ledger is used for all PAYG Payable

 

When you pay the ATO for the PAYG, it could be either via a BAS statement, or as a separate payment.  If paid separately, you can record the cheque via General Payments from the Bank account (usually 1020) to the PAYG Payable ledger (in this example 2600) or again via General Journals

 

There will be some variations on the above list

For example, you may pay some or all wages out of the Till – i.e. from the 1010 Cash on Hand account instead of a bank account

Paying by bank transfer will be the same as the entry above.

You could also set up individual accounts for PAYG paid for each employee (Overhead Expenses)

In that case you would record the NETT wages in the Wages account, and the PAYG withheld in the PAYG account.  Add the two entries together to get the Gross wages figure required on the BAS or PAYG reports for the ATO.

 

You can extend this set of entries to include Superannuation.

This will require a Superannuation account for each eligible employee (Overhead Expense – in the 9000 range), plus an account for Superannuation Payable (Liability, in the 2000 range)

 

When you need a report (or reports) on wages and tax paid, go to the GL reports and select GL Transactions by GL Code

Put in the date range required (usually a BAS period), and the GL Codes from 9500 to 9560 (using the above example)

The same report for the PAYG Payable ledger will give you the amount of PAYG you are due to pay for the quarter.

 

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